CRIEFF HIGHLAND GATHERING LIMITED v PERTH & KINROSS COUNCIL

At the Court of Session Lord Pentland rejected the case brought by Crieff Highland Gathering Limited to terminate the lease held by Perth and Kinross Council for the area known as the Market Park in Crieff. In July 2006, following a public local inquiry, outline planning permission was granted by a Reporter for the development of a Sainsbury’s supermarket on Market Park.

In 1872 an unincorporated association known as the Crieff Highland Gathering was established. It aims were to promote the holding of an annual Highland Gathering in Crieff and to encourage other sporting activities in the area. In 1935 the pursuer was incorporated as a limited company to acquire the whole property and assets of the Crieff Highland Gathering. By that time the Gathering’s assets included an area of ground in the town of Crieff known as the Market Park; it was this area of land which was the subject of the litigation.

By a lease dated 11 and 26 May 1983, the pursuer let the land to the Perth and Kinross District Council for use as a public park and recreation ground. Following local government reorganisation, the defender now holds the tenant’s interest under the lease. In the action the pursuer sought declarator that, by notice sent to the defender on 22 January 2009, the lease was validly terminated on the ground that the defender was in material breach of certain of its obligations under the lease. The pursuer also sought decree ordaining the defender to flit and remove from the subjects. The defender denied that it was in material breach of the lease and maintained that, in any event, a fair and reasonable landlord would not, in the whole circumstances, seek to terminate the lease.

It was clear from the evidence that the background to the present proceedings lay in the parties’ conflicting views as to what the future should hold for the subjects. The pursuer’s position has for some years been that the subjects should be sold for development as the site for a Sainsbury’s supermarket. They have entered into option agreements with developers which, if implemented, would allow for the sale of the subjects and the development of an improved sports ground at Pittenzie Road in Crieff where future Highland Games would be held.

Following a public local inquiry in July 2006, outline planning permission was granted by a Reporter for these two developments, the defender having previously refused to grant such permissions. The defender, on the other hand, considers that the Market Park should be retained for use as public open space. It acknowledges that there is a need for a new supermarket in Crieff, but favours a site on land at Duchlage Farm, not far from the subjects.

It was not until November 2007 that there was any suggestion by the pursuer that the lease should be brought to an end on the basis that the defender was in material breach of its obligations. By notice dated 23 November 2007 the pursuer’s solicitors intimated what were described in their brief letter as “numerous wants of repair within the subjects which fall within the tenant’s responsibility in terms of the lease”.

While the Court concluded that the pursuer had proved that the defender was in breach of certain of its obligations under some provisions in the lease, both parties accepted that, in order for the pursuer to have validly terminated the lease, the defender must have been in material breach of its obligations.

Lord Pentland decided that in the present case none of the various breaches on the part of the tenants (whether viewed singly or cumulatively) could properly be said to have been material.

The fact that the Market Park had been run under the current arrangements without any significant difficulty for a period of 28 years since the inception of the lease indicated that the essence of the contract between the parties had not been undermined. The lease is a long one with over 30 years still to run.

Lord Pentland concluded that the pursuer had not established that the defender was now or had ever been in material breach of contract. It followed that the pursuer was not entitled to bring the contract to an end.

In any event, his Lordship considered that a fair and reasonable landlord would not have acted as the pursuer did in seeking to terminate the lease, even if the defender had been in material breach of contract.

This summary is provided to assist in understanding the Court’s decision. It does not form part of the reasons for that decision. The full Opinion of the Court is the only authoritative document.